In the wake of reduced Russia’s oil supplies to Pavlodar refinery

21 мая 2012, 15:18

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An oil refinery. Photo courtesy of wordpress.com

The reduced supplies of Russian oil to the Pavlodar-based oil refinery haven’t reflected on the Kazakh market of petroleum products so far, KazTag Agency reports, citing the country’s Minister of Oil and Gas Sauat Mynbayev as saying on the sidelines of a government sitting May 21.

“There are certain issues related to decreased oil supplies (…) It is uncertain whether the oil refinery will be suspended or will keep its normal operations”, Mynbayev said.

“The situation is calm in the internal market of petroleum products. We are doing our best to secure supplies of Kazakh oil to the facility and import finished petroleum products, including from Russia”, he said.

According to him, Kazakhstan does admit that the two nations’ approaches to export duty on oil and petroleum products within the Customs Union are different and that Kazakhstan hopes to regulate all the debatable issues after forthcoming appointments in the Russian Government.

Last week Russia’s Transneft reduced oil supplies to the Pavlodar-based oil refinery twofold. Russia supplies up to 500 000 tons of oil to the facility a month. However, in May only 275 000 tons of oil will be supplied, according to Transneft’s spokesman Igor Demin. He elaborated that Kazakhstan hadn’t signed the agreement on calculating export duty on oil and petroleum products.

The Customs Union member states introduced quotas for duty-free supplies of oil. Russia and Kazakhstan are working out schemes to compensate the Russian budget for the duty-free exports.

Oil and Gas Minister Sauat Mynbayev had said earlier that, “the current overhaul of the three refineries before 2015 [based in Pavlodar, Shymkent and Atyrau] will enable to raise processing to 17.5 million tons, introducing deeper conversion to start producing petrol in line with Euro-5 emission standards”. Before the modernization the refineries processed a bit over 13 million tons a year.